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by Jonah Goldberg
Why aren't more people furious about the Libor scandal?
That's a question mostly being asked on the political left these days, and they're right to ask it.
Here are the basics:
Indeed, a conservative estimate is that some $350 trillion in bonds and loans are pegged to Libor worldwide. That's more than 20 times the GDP of the United States.
In email exchanges between
The left's response, predictably, is to pound the table about corruption, the need for more regulation and the inherent sinfulness of capitalism.
They're entirely right about the first part, possibly right about the second and deeply confused about the third.
The corruption really is outrageous, and I wish my fellow conservatives could muster a bit more public disgust. There's really no point in simultaneously talking about "leaving things to the market" and celebrating the rule of law if you're going to respond to this kind of game-rigging with a yawn.
Moreover, as a political matter, staying on the sidelines almost guarantees that the problem will be made worse. The relentless push for more regulation and more oversight boards, commissions and agencies hasn't done anything to curb such scandals. But making the relationship between government and business more interwoven and complex has entrenched the "too big to fail" mind-set. What's required aren't new regulations so much as relentless enforcement of the existing laws, without fear or favor.
Which leads me to the left's confusion. Capitalism is not inherently sinful, capitalists are -- but so are socialists, progressives, conservatives, libertarians and every other label we apply to human beings.
When I hear people complain about the evils of capitalism, it's like they think there's something especially corrupt about capitalistic institutions, as if every other institution -- including government itself -- isn't prone to the same basic shortcomings. If you don't think socialists or bureaucrats are just as likely to rig the rules to their benefit, you're quite simply ignorant of a lot of history -- and current events.
You can never eliminate the temptations of sin. But you can create accountability for sinning. That's one reason why our system of liberal democratic capitalism is superior to other systems: It creates more opportunities to hold wrongdoers -- and fools -- accountable.
Or at least it's supposed to. The market is supposed to penalize economic mistakes. The electorate is supposed to punish incompetent or venal officials. Civil society is supposed to police malice and buffoonery. And the government is supposed to punish criminals.
The key to all of this is the rule of law and the minimization of what Edmund Burke called "arbitrary power." When institutions -- any institutions -- become immunized against the legitimate forces of accountability, it should be seen as a scandal. The more inured we grow to such stories, the more we come to accept that acceptable behavior is simply whatever we can get away with.
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The Libor Scandal: Blame Barclays Not Capitalism